Subscribe to Our Newsletter

Sign-up Now

Are you afraid of the math? Maybe you should be...

Featured in:

A common measure used in financial statement analysis is advertising per new vehicle retailed. Slightly more difficult to get is the advertising per opportunity which is the advertising investment divided by the traffic count. Sales managers sometimes used this figure negatively to badger salespeople into taking each opportunity seriously. The abusive sales manager rants: "it costs me $257 everytime I bring a prospect in and you blow it!"

Afraid of the math? Try the old math in the new reality of highly researched shoppers driving our traffic numbers down and (hopefully) closing ratios up:

What does it cost now when a new and under-trained salesperson blows through 10 prospects without selling a car?

Back when we had lots of floor traffic and a 20% closing ratio was strong... 10 prospects x 20% should have got 2 sales so we lost more than $6000 in gross.
Now there are on average less than 2 dealers being visited on the customer's shortlist. All things being equal we should mathematically get a 50% closing ratio. 10 prospects x 50% = 5 sales lost or $15000 in gross. Meanwhile, the training to avoid this costs hundreds not thousands.

We look at this lost sales figure as the cost of "not training". It doesn't get much attention because it will never appear on any report or financial statement.
What the dealer didn't get isn't tracked.

Many managers still follow the pattern of putting under-prepared new people on the floor to "see how they do". With the new reality of highly educated shoppers, shorter "short-lists", and low traffic counts, that new staff strategy just doesn't work. Now more than ever before you cannot afford to allow an under-trained, unprepared salesperson to talk to even one prospect. The math is just too scary!
Want to improve the math? $1 a day is all it takes...

Automotivaters is highly recognized and one of the most respected automotive training and consulting companies in Canada. Since 1987, the company has acquired an international client base throughout Canada, the United States, the Philippines, Indonesia, French Polynesia, Malaysia, Thailand, and New Zealand.

See us at:

Copyright © 2017 by ISI/PAL Automotivaters Inc. If you share this, print it out, or reproduce it in any way, please retain this copyright statement.

Education Centre category: